Maxing out a credit card?

Question

I recently got a visa platinum credit card and have a 3k limit. . How bad is it to max it out? Scenerio: I use all of the 3 thousand dollars and then pay 600 dollars every month until its paid off. I have 15 months interest free. Would this be ok?

Answer 1

Two problems first of all if you do this your score is going to take a big hit, second your math needs work $3,000.00 divided by $600.00 a month is 5-months not 15.

Anytime you exceed 30 percent usage on a credit card your score takes a hit, when you exceed 50 percent it takes another hit and again at 90 percent.

Additional information:

OK, now that I have all of the information. You can most likely look for a initial drop of around 50 points, but as soon as you get your balance back to below 30 percent usage your score should go back up the next time the credit card company reports.

Answer 2

I'd caution you to really think about what you need the green for. There are other ways to get money.

Loans from banks typically have lower rates then credit cards. I know the first 15 months are intrest free but make sure you read the fine print. Alot of companies will tack on all the intrest you would have had if you go over the 15 months.

Also if you're late on ONE payment they can void the promise of no intrest, in addition to a 40.00 late paymenyt fee. Most banks give a 15 day grace period.

If you have no problem with 600 a month then maybe you could hold for a while and put your money into a bond or money market and the intrest they'll pay you will add quickly.

Be careful pulling out all 3K at once. Sometimes there is a limit on what you can spend in one day.

Also make sure the intrest free bit includes cash advances if that's how you're going. Sometimes they only cover when you sign your reciept sales or debit sales or sales with certain stores.

I don't know how desprite you are for the money but I'd caution you against credit cards.